IPhone 1.1.1 update barfs on SIM PIN.

I have a completely unmodified iPhone which I updated to 1.1.1 this weekend. While the phone is unmodified, I do have a SIM PIN set for security reasons. After starting the update process, I left to do other things. When I came back, iTunes was displaying an error about updating the phone, and the phone screen was off, and was unresponsive to any button presses. I disconnected the iPhone, and it immediately went into recovery mode with the yellow triangle. I reconnected the phone and selected restore. Once the restore process began, there was an alert on the screen about the locked SIM, but the UI was unresponsive and I had no way to unlock the SIM. Once the restore was completed, I reached the activate screen, and was finally able to unlock the SIM. While I now have 1.1.1 on my phone, I lost all of my WiFi passwords, YouTube bookmarks, and any other data that does not get backed up or survives a restore. I assume I would not have had this difficulty if my SIM PIN was not enabled. iTunes should be able to detect a SIM with an active PIN and disallow upgrade until the SIM PIN is turned off.

I know it doesn't help, but i have SIM PIN enabled too, and my iPhone updated last week without problems - it restarted near the beginning of the process but didn't require the unlock PIN, presumably because the SIM wasn't accessed, and then restarted again at the end of the process, asking for the PIN. When I inputted it, the phone went immediately back into service.
Whatever your issue is caused by, it's not the SIM PIN responsible.
I would contact Apple to describe the symptom and see what they say.

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